Social Security faces insolvency in 2033, one year sooner than previously expected

social security retirement fund Money could run out by 2033, a year earlier than previously estimated, according to a new government report released Friday.

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The findings of the Social Security and Medicare Trustees report show that a 3% decline in GDP and labor productivity over the next decade is accelerating toward bankruptcy.

Unless major changes are made before 2034 to strengthen the eligibility program, more than 66 million Americans will see a reduction in benefits of between about 23% and 25%.

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Meanwhile, Medicare faces an even greater financial shortfall in the coming years: Reports show that Medicare’s Hospital Insurance Trust Fund – known as Part A and helping to cover inpatient hospital stays is — will only be able to pay full scheduled benefits until 2031, according to the report. This is in comparison to what trustees previously estimated after three years.

At that point, the fund’s reserves “will be depleted and continued program income will be sufficient to pay 89 percent of total scheduled benefits,” the report said. This could result in an 11% pay cut to health care providers.

Biden proposes tax hike over $400,000 on Americans to fund Medicare

Treasury Secretary Janet YellenThose who lead the trustees stressed the need to strengthen both the Medicare and Social Security funds.

“Social Security and Medicare are the two foundational programs older Americans rely on for their retirement security,” he said in a statement. “The Biden-Harris Administration is committed to ensuring the long-term viability of these important programs so that retirees can continue to enjoy their hard-earned benefits.”

The future of the program has emerged as a contentious issue between Republicans and Democrats, with President Biden accusing GOP lawmakers of wanting to reduce funding for Medicare and Social Security during his term. State of the Union Address.

Republicans have repeatedly pushed back on that claim, Insisted that they do not want to cut funding for any entitlement programs.

Biden proposed raising the Medicare tax from 3.8% to 5% on annual income above $400,000 in his budget proposal earlier this month. They also closed a loophole used by business owners and high earners to shield some of their income from additional taxes.

The White House estimated that the released changes would extend the Medicare trust fund for an additional 25 years, “beyond 2050.”

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Proposals are not likely to be of much benefit Support in deeply divided CongressAnd it faces almost certain disapproval from Republicans who won control of the House last year.

The president did not address the looming Social Security bankruptcy in his budget.